The American Bankers Association, along with five financial services trade groups, released a white paper today outlining obstacles and solutions for improving financial inclusion for the unbanked population and for reducing the use of high-cost nonbank financial products and services.
The unbanked population currently represents 6% of U.S. households, according to the FDIC. The trade groups’ report identifies reasons for individuals being unbanked and highlights existing actions from banks, credit unions, nonprofits and policymakers that have shown promise in addressing the challenge of bringing the under-served more fully into the banking system.
“This report details not just how many households are unbanked, but why,” said ABA Chief Policy Officer Naomi Camper. “It underscores why ABA continues to urge every bank in the country to offer Bank On-certified accounts, which are helping to bring more people into the banking system. With a Bank On-certified account, consumers can feel confident that banks want their business and can provide them with a low-cost, insured account that offers all the economic opportunities that come with being banked.”
Instead of establishing a large, duplicative and potentially expensive banking infrastructure to create bank accounts through the Federal Reserve or the U.S. Postal Service, there are more effective and less costly ways to address the issue, the report found. In addition to ABA, author organizations include the Clearing House, the Consumer Bankers Association, the Credit Union National Association, the Mid-Sized Bank Coalition of America and the National Bankers Association.